On March 17, the Frederick County Council approved Council Bill 20-03, which raises the local recordation tax rate to a total of $14/$1,000 to fund additional agriculture preservation programs. After comments from FCAR, the new rate will now take effect on October 1, 2020.
FCAR offered strong opposition to this bill, citing its impacts on first-time and lower-income buyers in particular, and highlighting the significant tax revenues that real estate transactions already provide to the County. We also noted that because ag preservation benefits the entire community, revenues should come from broad-based funding sources. However, the bill had widespread support from agricultural, environmental and historic preservation sectors, all of which pushed for its passage.
When it appeared likely that the bill would pass, FCAR offered several amendments to lessen the effects of the increase. These include: reducing the overall rate increase, delaying the effective date of the increase, exempting first-time buyers, and increasing the amount of recordation tax revenues which are devoted to housing programs.
Based upon our feedback, we are pleased to report that the Council delayed the increase to October 1 instead of July 1, as was originally proposed. FCAR noted that increasing the rate during the summer months, when transaction volume is at its highest, would create difficulties for both consumers and real estate service providers alike. We appreciate the Council incorporating our suggestion into the bill.
In addition, Council Members expressed a desire to revisit the bill once normal government operations resume to explore additional ways to offset this increase for first-time buyers. FCAR will continue to work with the Council on these amendments in the coming months.
FCAR wants to thank all our members who responded to our Call for Action on 20-03. While we did not defeat the bill outright, your feedback helped us to modify this proposal to one which is less harmful to our industry and our clients.
FCAR will always keep fighting on your behalf to keep our industry strong and to protect the dream of homeownership for Frederick County residents.